According to my loan officer- I would save approximately $350.00 in taxes monthly on a home with my mortgage rate/calculations he did. I think its sound- about $1800 for Principle,interest, taxes, PMI, etc.

That said, I would like to adjust my withholding so that I dont get a huge refund at the end of the year. My question is this- as principle starts to go up, and interest goes down, do I need to re-adjust my withholding each year to match that?

My buddy (who isnt a financial advisor) said that when buying a home you adjust withholdings and then leave it as is for the life of your loan. Is this true?

My fear is that I will withhold 300-400 dollars in taxes each month, It will be right at first but then three years down the road find out I owe a ton at the end of the tax season. Thanks.

Tue Jan 24, 2017 5:25 pm

oldguySenior Member

Cash: $ 743.45

Posts: 3616
Joined: 21 May 2006
Location: arizona

quote: According to my loan officer- I would save approximately $350.00 in taxes monthly on a home with my mortgage rate/calculations he did

Your loan officer may be over-estimating. Say that you have a $300,000 loan @ 4%, your interest cost is $12,000/yr. But if you are a married couple, you get a standard deduction of $12,600/yr for free. So your mortgage deduction would be worth zero.

But if you have a bunch of deductions - say state income tax, property tax, charity - that add up to $9000, you add the $12,000 to $9000, ie, $21,000. So you would deduct $21,000 from your income way better than using the $12,600 standard deduction. And it doesn't change all that much over the first 10 or more years.

As for owing a ton at year-end - what's wrong with that? It doesn't affect your tax bill, the total is the same whether you over-withhold all year or under-withhold.
Personally I make sure that I never get a refund, I always want to owe on April 15.

I've read that the average refund is about $3000 - and that people are happier when it is even bigger?? My money stays in a taxable SP500 Index that has an average longterm return of 11%/yr - so I leave my money there all year and until April 15 of the next year.

Tue Jan 24, 2017 10:16 pm

thenewguy1New Poster

Cash: $ 0.45

Posts: 2
Joined: 24 Jan 2017

quote:Originally posted by oldguy

quote: According to my loan officer- I would save approximately $350.00 in taxes monthly on a home with my mortgage rate/calculations he did

Your loan officer may be over-estimating. Say that you have a $300,000 loan @ 4%, your interest cost is $12,000/yr. But if you are a married couple, you get a standard deduction of $12,600/yr for free. So your mortgage deduction would be worth zero.

But if you have a bunch of deductions - say state income tax, property tax, charity - that add up to $9000, you add the $12,000 to $9000, ie, $21,000. So you would deduct $21,000 from your income way better than using the $12,600 standard deduction. And it doesn't change all that much over the first 10 or more years.

As for owing a ton at year-end - what's wrong with that? It doesn't affect your tax bill, the total is the same whether you over-withhold all year or under-withhold.
Personally I make sure that I never get a refund, I always want to owe on April 15.

I've read that the average refund is about $3000 - and that people are happier when it is even bigger?? My money stays in a taxable SP500 Index that has an average longterm return of 11%/yr - so I leave my money there all year and until April 15 of the next year.

Thanks for that.. so it doesnt change much over the years?

I do itemize and recall getting a good 2-3k above the standard deduction last year.

Wed Jan 25, 2017 12:22 am

avanimehta05First Time Poster

Cash: $ 0.20

Posts: 1
Joined: 13 Nov 2017

need escort in Delhi

http://www.mohinimisra.com/
the escorts in Delhi are really breathtaking companions for you. They gauge from every angle and hug and love you accordingly. While having interaction with them, do not hide anything from them. Let them know what you like and what you do not like. Even if you are novice, you will be provided guidance by them.

Mon Dec 04, 2017 11:14 am

sonamsharma380First Time Poster

Cash: $ 0.20

Posts: 1
Joined: 04 Jan 2018
Location: Delhi

Delhi Escorts Female

Delhi is one of the most happening place in India for fun, joy and services, services like which gives you pleasure a lot of pleasure, we provide pleasure through Delhi escort services with a touch of professionalism and most importantly with client satisfaction.
Escort services in Delhi